Correlation Between Sumitomo Mitsui and Copper Mountain
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Copper Mountain at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sumitomo Mitsui and Copper Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Mitsui Financial and Copper Mountain Mining, you can compare the effects of market volatilities on Sumitomo Mitsui and Copper Mountain and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sumitomo Mitsui with a short position of Copper Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Copper Mountain.
Diversification Opportunities for Sumitomo Mitsui and Copper Mountain
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Copper is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining and Sumitomo Mitsui is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sumitomo Mitsui Financial are associated (or correlated) with Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Copper Mountain go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Copper Mountain
Assuming the 90 days horizon Sumitomo Mitsui Financial is expected to generate 0.83 times more return on investment than Copper Mountain. However, Sumitomo Mitsui Financial is 1.21 times less risky than Copper Mountain. It trades about 0.13 of its potential returns per unit of risk. Copper Mountain Mining is currently generating about -0.28 per unit of risk. If you would invest 2,048 in Sumitomo Mitsui Financial on August 29, 2024 and sell it today you would earn a total of 248.00 from holding Sumitomo Mitsui Financial or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Copper Mountain Mining
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Copper Mountain Mining |
Sumitomo Mitsui and Copper Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Copper Mountain
The main advantage of trading using opposite Sumitomo Mitsui and Copper Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Copper Mountain can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Copper Mountain will offset losses from the drop in Copper Mountain's long position.| Sumitomo Mitsui vs. ANZ Group Holdings | Sumitomo Mitsui vs. Agricultural Bank | Sumitomo Mitsui vs. Industrial and Commercial | Sumitomo Mitsui vs. Bank of America |
| Copper Mountain vs. Ero Copper Corp | Copper Mountain vs. Copper Fox Metals | Copper Mountain vs. First Quantum Minerals | Copper Mountain vs. Hudbay Minerals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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